<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 - For the Quarterly Period Ended September 30, 2000
------------------
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 -For the Transition Period From
_______________________________ to _____________________________________
Commission file number 1-6311
TIDEWATER INC.
--------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 72-0487776
--------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
601 Poydras Street, Suite 1900, New Orleans, Louisiana 70130
--------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (504) 568-1010
---------------------------
--------------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last
report.
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or of such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO ___________
---------
55,800,558 shares of Tidewater Inc. common stock $.10 par value per share were
outstanding on October 16, 2000. Excluded from the calculation of shares
outstanding at October 16, 2000 are 4,754,903 shares held by the Registrant's
Grantor Stock Ownership Trust. Registrant has no other class of common stock
outstanding.
-1-
<PAGE>
PART I. FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Item 1. Financial Statements
--------------------
TIDEWATER INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
-------------------------------------------------------------------------------------------------------------------
September 30, March 31,
ASSETS 2000 2000
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 268,234 226,910
Trade and other receivables 151,506 149,006
Marine operating supplies 29,209 25,405
Other current assets 2,654 2,372
-------------------------------------------------------------------------------------------------------------------
Total current assets 451,603 403,693
-------------------------------------------------------------------------------------------------------------------
Investments in, at equity, and advances to
unconsolidated companies 9,877 23,275
Properties and equipment:
Vessels and related equipment 1,369,010 1,356,177
Other properties and equipment 42,908 42,474
-------------------------------------------------------------------------------------------------------------------
1,411,918 1,398,651
Less accumulated depreciation 850,851 842,620
-------------------------------------------------------------------------------------------------------------------
Net properties and equipment 561,067 556,031
-------------------------------------------------------------------------------------------------------------------
Goodwill, net 333,421 338,006
Other assets 117,092 111,331
-------------------------------------------------------------------------------------------------------------------
Total assets $ 1,473,060 1,432,336
===================================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
-------------------------------------------------------------------------------------------------------------------
Current liabilities:
Accounts payable and accrued expenses 68,857 66,943
Accrued property and liability losses 6,937 4,322
Income taxes 6,246 3,572
-------------------------------------------------------------------------------------------------------------------
Total current liabilities 82,040 74,837
-------------------------------------------------------------------------------------------------------------------
Deferred income taxes 162,566 145,076
Accrued property and liability losses 41,392 49,549
Other liabilities and deferred credits 50,557 48,673
Stockholders' equity:
Common stock of $.10 par value, 125,000,000 shares
authorized, issued 60,555,461 shares at September
and 60,561,892 shares at March 6,056 6,056
Other stockholders' equity 1,130,449 1,108,145
-------------------------------------------------------------------------------------------------------------------
Total stockholders' equity 1,136,505 1,114,201
-------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $ 1,473,060 1,432,336
===================================================================================================================
</TABLE>
See Notes to Unaudited Condensed Consolidated Financial Statements.
-2-
<PAGE>
<TABLE>
<CAPTION>
TIDEWATER INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except share and per share data)
-------------------------------------------------------------------------------------------------------------------------
Quarter Ended Six Months Ended
September 30, September 30,
------------------------- ----------------------
2000 1999 2000 1999
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues:
Vessel revenues $ 135,642 129,735 260,947 278,012
Other marine revenues 10,495 9,211 22,074 15,464
-------------------------------------------------------------------------------------------------------------------------
146,137 138,946 283,021 293,476
-------------------------------------------------------------------------------------------------------------------------
Costs and expenses:
Vessel operating costs 88,304 77,431 176,255 169,323
Costs of other marine revenues 8,066 7,434 17,309 11,789
Depreciation and amortization 19,455 20,335 38,526 43,277
General and administrative 16,337 16,647 32,277 33,593
-------------------------------------------------------------------------------------------------------------------------
132,162 121,847 264,367 257,982
-------------------------------------------------------------------------------------------------------------------------
13,975 17,099 18,654 35,494
Other income (expenses):
Foreign exchange gain (loss) (139) 275 (62) 203
Gain on sales of assets 19,360 6,605 20,324 8,964
Equity in net earnings of unconsolidated companies 1,693 1,900 4,035 3,886
Minority interests 24 (44) (172) (291)
Interest and miscellaneous income 4,661 2,100 8,953 4,014
Interest and other debt costs (163) (163) (324) (289)
-------------------------------------------------------------------------------------------------------------------------
25,436 10,673 32,754 16,487
-------------------------------------------------------------------------------------------------------------------------
Earnings before income taxes 39,411 27,772 51,408 51,981
Income taxes 13,114 8,887 16,953 16,634
-------------------------------------------------------------------------------------------------------------------------
Net earnings $ 26,297 18,885 34,455 35,347
=========================================================================================================================
Earnings per common share $ .47 .34 .62 .64
=========================================================================================================================
Diluted earnings per common share $ .47 .34 .61 .64
=========================================================================================================================
Weighted average common shares outstanding 55,673,269 55,523,727 55,644,550 55,511,093
Incremental common shares from stock options 468,207 304,923 442,589 236,211
-------------------------------------------------------------------------------------------------------------------------
Adjusted weighted average common shares 56,141,476 55,828,650 56,087,139 55,747,304
=========================================================================================================================
Cash dividends declared per common share $ .15 .15 .30 .30
=========================================================================================================================
</TABLE>
See Notes to Unaudited Condensed Consolidated Financial Statements.
-3-
<PAGE>
<TABLE>
<CAPTION>
TIDEWATER INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
------------------------------------------------------------------------------------------------------------------------
Quarter Ended Six Months Ended
September 30, September 30,
------------------------ ----------------------
2000 1999 2000 1999
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net cash provided by operating activities $ 23,752 51,311 57,580 131,846
------------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Proceeds from sales of assets 39,272 49,647 42,026 53,326
Additions to properties and equipment (37,197) (29,652) (43,807) (42,439)
Other --- 25 (23) 62
------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) investing activities 2,075 20,020 (1,804) 10,949
========================================================================================================================
Cash flows from financing activities:
Proceeds from issuance of common stock 1,431 38 2,263 188
Cash dividends (8,359) (8,342) (16,715) (16,680)
------------------------------------------------------------------------------------------------------------------------
Net cash used in financing activities (6,928) (8,304) (14,452) (16,492)
------------------------------------------------------------------------------------------------------------------------
Net change in cash and cash equivalents 18,899 63,027 41,324 126,303
Cash and cash equivalents at beginning of period 249,335 73,698 226,910 10,422
------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 268,234 136,725 268,234 136,725
========================================================================================================================
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 128 129 129 326
Income taxes $ 4,615 10,569 8,386 17,348
========================================================================================================================
</TABLE>
See Notes to Unaudited Condensed Consolidated Financial Statements.
-4-
<PAGE>
TIDEWATER INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
(1) Interim Financial Statements
The consolidated financial information for the interim periods presented herein
has not been audited by independent accountants, but in the opinion of
management, all adjustments (consisting only of normal recurring adjustments)
necessary for a fair presentation of the condensed consolidated balance sheets
and the condensed consolidated statements of earnings and cash flows at the
dates and for the periods indicated have been made. Results of operations for
interim periods are not necessarily indicative of results of operations for the
respective full years.
(2) Stockholders' Equity
At September 30, 2000 and March 31, 2000, 4,756,409 and 4,911,445 shares,
respectively, of common stock were held in a grantor stock ownership plan trust
for the benefit of stock-based employee benefits programs. These shares are not
included in common shares outstanding for earnings per share calculations and
transactions between the company and the trust, including dividends paid on the
company's common stock, are eliminated in consolidating the accounts of the
trust and the company.
(3) Income Taxes
Income tax expense for interim periods is based on estimates of the effective
tax rate for the entire fiscal year. The effective tax rate applicable to pre-
tax earnings was 33.3% and 33.0% for the quarter and six-month period ended
September 30, 2000, respectively. The effective tax rate applicable to pre-tax
earnings for the quarter and six-month period ended September 30, 1999 was 32%.
(4) Gain on Sales of Assets
Gain on sales of assets in the quarter ended September 30, 2000 includes $2.6
million resulting from sales of marine vessels and a $16.8 million gain
resulting from the sale of the company's 40% holding in its marine joint
venture, National Marine Service (NMS), for approximately $31 million. The
after-tax effect of the gain on the sale of the company's interest in NMS was
$10.9 million, or $.19 per share.
(5) Vessel Fleet Acquisition
On October 18, 2000 the company entered into an agreement to purchase eight
vessels from The Sanko Steamship Co., Ltd. for $160 million in cash. Closing of
the purchase is anticipated for mid to late November 2000. Four of the vessels
are large anchor-handling towing supply vessels and four are large North
Sea-type platform supply vessels.
-5-
<PAGE>
INDEPENDENT ACCOUNTANTS' REVIEW REPORT
--------------------------------------
The Board of Directors and Shareholders
Tidewater Inc.
We have reviewed the accompanying condensed consolidated balance sheet of
Tidewater Inc. and subsidiaries as of September 30, 2000, and the related
condensed consolidated statements of earnings and cash flows for the three-month
and six-month periods ended September 30, 2000 and 1999. These financial
statements are the responsibility of the Company's management.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data, and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with auditing standards generally accepted in the United States,
which will be performed for the full year with the objective of expressing an
opinion regarding the financial statements taken as a whole. Accordingly, we do
not express such an opinion.
Based on our reviews, we are not aware of any material modifications that should
be made to the accompanying condensed consolidated financial statements referred
to above for them to be in conformity with accounting principles generally
accepted in the United States.
We have previously audited, in accordance with auditing standards generally
accepted in the United States, the consolidated balance sheet of Tidewater Inc.
and subsidiaries as of March 31, 2000, and the related consolidated statements
of earnings, stockholders' equity and cash flows for the year then ended, not
presented herein, and in our report dated April 25, 2000, we expressed an
unqualified opinion on those consolidated financial statements. In our opinion,
the information set forth in the accompanying condensed consolidated balance
sheet as of March 31, 2000, is fairly stated, in all material respects, in
relation to the consolidated balance sheet from which it has been derived.
Ernst & Young LLP
New Orleans, Louisiana
October 18, 2000
-6-
<PAGE>
Item 2. Management's Discussion and Analysis
------------------------------------
The company provides services to the international offshore energy industry
through the operation of a diversified fleet of marine service vessels.
Revenues, net earnings and cash flows from operations are dependent upon the
activity level of the vessel fleet which is ultimately dependent upon oil and
natural gas prices which, in turn, are determined by the supply/demand
relationship for oil and natural gas. The following discussion should be read in
conjunction with the unaudited condensed consolidated financial statements and
related disclosures.
In accordance with the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995, the company notes that certain statements set
forth in this Quarterly Report on Form 10-Q which provide other than historical
information and which are forward looking, involve risks and uncertainties that
may impact the company's actual results of operations. The company faces many
risks and uncertainties, many of which are beyond the control of the company,
including: fluctuations in oil and gas prices; changes in capital spending by
customers in the energy industry for exploration, development and production;
unsettled political conditions, civil unrest and governmental actions,
especially in higher risk countries of operations; foreign currency controls;
and environmental and labor laws. Readers should consider all of these risk
factors as well as other information contained in this report.
MARINE OPERATIONS
-----------------
Offshore service vessels provide a diverse range of services to the energy
industry. Fleet size, utilization and vessel day rates primarily determine the
amount of revenues and operating profit because operating costs and depreciation
do not change proportionally when revenue changes. Operating costs primarily
consist of crew costs, repair and maintenance, insurance, fuel, lube oil and
supplies. Fleet size and utilization are the major factors which affect crew
costs. The timing and amount of repair and maintenance costs are influenced by
vessel age and scheduled drydockings to satisfy safety and inspection
requirements mandated by regulatory agencies. Whenever possible, vessel
drydockings are done during seasonally slow periods to minimize the impact on
vessel operations and are only done if economically justified, given the
vessel's age and physical condition.
-7-
<PAGE>
The following table compares revenues and operating costs (excluding general and
administrative expense and depreciation expense) for the quarters and six-month
periods ended September 30 and for the quarter ended June 30, 2000. Vessel
revenues and operating costs relate to vessels owned and operated by the company
while other marine services relate to third-party activities of the company's
shipyards, brokered vessels and other miscellaneous marine-related activities.
<TABLE>
<CAPTION>
Quarter
Quarter Ended Six Months Ended Ended
September 30, September 30, June 30,
------------------------ --------------------- ---------
(In thousands) 2000 1999 2000 1999 2000
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenues:
Vessel revenues:
United States $ 44,807 34,918 81,310 67,676 36,503
International 90,835 94,817 179,637 210,336 88,802
------------------------------------------------------------------------------------------------------------------
135,642 129,735 260,947 278,012 125,305
Other marine revenues 10,495 9,211 22,074 15,464 11,579
------------------------------------------------------------------------------------------------------------------
$ 146,137 138,946 283,021 293,476 136,884
==================================================================================================================
Operating costs:
Vessel operating costs:
Crew costs $ 45,986 44,135 89,351 97,544 43,365
Repair and maintenance 24,190 16,334 50,078 33,396 25,888
Insurance 4,718 4,264 9,687 9,561 4,969
Fuel, lube and supplies 6,711 5,508 12,823 12,492 6,112
Other 6,699 7,190 14,316 16,330 7,617
------------------------------------------------------------------------------------------------------------------
88,304 77,431 176,255 169,323 87,951
Costs of other marine revenues 8,066 7,434 17,309 11,789 9,243
------------------------------------------------------------------------------------------------------------------
$ 96,370 84,865 193,564 181,112 97,194
==================================================================================================================
</TABLE>
Marine support services are conducted worldwide with assets that are highly
mobile. Revenues are principally derived from offshore service vessels, which
regularly and routinely move from one operating area to another, often to and
from offshore operating areas in different continents. Because of this asset
mobility, revenues and long-lived assets attributable to the company's
international marine operations in any one country are not "material" as that
term is defined by SFAS No. 131.
As a result of the uncertainty of certain customers to make payment of vessel
charter hire, the company has deferred the recognition of approximately $9.5
million of billings as of September 30, 2000 ($10.7 million of billings as of
March 31, 2000), which would otherwise have been recognized as revenue. The
company will recognize the amounts as revenue as cash is collected or at such
time as the uncertainty has been significantly reduced.
Oil and natural gas prices have appreciated significantly during calendar years
1999 and 2000. The increases in the pricing of oil and natural gas combined with
severe tightening of inventory levels for both crude oil and natural gas
continue to increase the demand for working drilling rigs and services in the
U.S. Gulf of Mexico and on a global basis. Strong demand for natural resources
has prompted the oil and gas exploration and production companies to increase
capital spending in order to take advantage of improving industry conditions.
U.S.-based vessel demand is expected to increase as market conditions and
drilling rig utilization rates continue to improve and international-based
vessel demand is expected to trend upward as international drilling activity
recovers.
-8-
<PAGE>
Marine operating profit and other components of earnings before income taxes for
the quarters and six-month periods ended September 30 and for the quarter ended
June 30, 2000 consist of the following:
<TABLE>
<CAPTION>
Quarter
Quarter Ended Six Months Ended Ended
September 30, September 30, June 30,
------------------ -------------------- ---------
(In thousands) 2000 1999 2000 1999 2000
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Vessel activity:
United States $ 420 399 (5,055) 2 (5,475)
International 14,559 18,633 26,775 39,680 12,216
------------------------------------------------------------------------------------------------------------------
14,979 19,032 21,720 39,682 6,741
Gain on sales of assets 19,360 6,598 20,324 8,955 964
Other marine services 2,306 1,661 4,536 3,325 2,230
------------------------------------------------------------------------------------------------------------------
Operating profit 36,645 27,291 46,580 51,962 9,935
------------------------------------------------------------------------------------------------------------------
Equity in net earnings of
unconsolidated companies 1,693 1,900 4,035 3,886 2,342
Interest and other debt costs (163) (163) (324) (289) (161)
Corporate general and administrative (3,576) (3,120) (6,887) (6,065) (3,311)
Other income 4,812 1,864 8,004 2,487 3,192
------------------------------------------------------------------------------------------------------------------
Earnings before income taxes $ 39,411 27,772 51,408 51,981 11,997
==================================================================================================================
</TABLE>
U.S.-based vessel revenues for the quarter and six-month periods ended September
30, 2000 have increased approximately 28% and 20%, respectively, as compared to
the same periods in fiscal 2000 as a result of higher utilization and average
day rates. Improving market conditions and vessel demand in the U.S. Gulf of
Mexico continue to apply upward pressure on average day rates for the U.S.-based
towing supply/supply vessels, the company's major income producing asset. As of
September 30, 2000, the towing supply/supply vessels operating in the U.S. Gulf
of Mexico are experiencing approximately $5,000 average day rates and 66%
utilization.
U.S.-based operating profit for the quarter ended September 30, 2000 increased
slightly as compared to the same period in fiscal 2000 primarily as a result of
increases in vessel revenues offset by higher repair and maintenance costs and
crew costs. U.S.-based operating profit for the six-month period ended September
30, 2000 decreased from the comparative period in fiscal 2000 despite increases
in vessel revenues primarily as a result of higher repair and maintenance costs
and crew costs. Repair and maintenance costs increased as a result of costs
incurred from an intense drydocking program the company initiated during the
first quarter of fiscal 2001 and continued during the second quarter of fiscal
2001 in order to ready equipment for an expected improvement in demand for its
vessels. The company initiated this drydocking program while vessel demand and
average day rates in the domestic market have not fully recovered; thus
sacrificing short-term profitability in anticipation of higher average day rates
and vessel demand when market conditions in the U.S. Gulf of Mexico improve. The
company will continue to perform vessel drydockings and consequently incur high
repair and maintenance costs as more vessels are removed from stack as a result
of improving market conditions in the U.S. Gulf of Mexico. Crew costs increased
due to employing more vessel personnel as a result of stronger demand for the
company's services in the domestic market.
Current quarter U.S.-based vessel revenues increased 23% as compared to the
previous quarter due to higher average day rates and utilization resulting from
improved market conditions and vessel demand in the U.S. Gulf of Mexico. U.S.-
based operating profit increased during the current quarter as compared to the
previous quarter as a result of higher average day rates and utilization.
International-based vessel revenues for the quarter and six-month periods ended
September 30, 2000 decreased 4% and 15%, respectively, from the comparative
periods in fiscal 2000 as a result
-9-
<PAGE>
of lower average day rates and a decrease in the number of active vessels in the
international-based fleet. The company sold its safety/standby vessels in July
1999, as it did not conform to the company's long-range strategies.
International vessel demand has trended upwards in recent months as
international drilling activity recovers from the curtailments in customer
spending due to the oil industry slow down.
International-based operating profit for the quarter and six-month periods ended
September 30, 2000 decreased 22% and 33%, respectively, from the comparative
periods in fiscal 2000 as a result of lower vessel revenues and higher repair
and maintenance costs. Repair and maintenance costs increased primarily due to a
higher number of international-based vessels drydockings being performed.
International vessel utilization rates increased during the comparative periods,
but primarily as a result of withdrawing 25 older, little-used vessels from
active service during the latter part of fiscal 2000 at which time they were
removed from the utilization statistics. Vessel utilization rates are a function
of vessel days worked and vessel days available.
Current quarter international-based vessel revenues increased slightly as
compared to the previous quarter as a result of higher average day rates.
International-based operating profit increased 19% as compared to the previous
quarter as a result of higher vessel revenues and lower repair and maintenance
costs primarily due to fewer international-based vessel drydockings being
performed during the quarter.
Gain on sales of assets increased during the current quarter due to a $16.8
million gain resulting from the sale of the company's 40% holding in its marine
joint venture, National Marine Service. Other income increased during the
current six-month period as a result of interest income earned on an increased
cash balance.
Vessel utilization is determined primarily by market conditions and to a lesser
extent by drydocking requirements. Vessel day rates are determined by the demand
created through the level of offshore exploration, development and production
spending by energy companies relative to the supply of offshore service vessels.
Suitability of equipment and the degree of service provided also influence
vessel day rates. The following tables compare day-based utilization percentages
and average day rates by vessel class and in total for the quarters and six-
month periods ended September 30 and for the quarter ended June 30, 2000:
-10-
<PAGE>
<TABLE>
<CAPTION>
Quarter
Quarter Ended Six Months Ended Ended
September 30, September 30, June 30,
-------------------- --------------------- -----------
2000 1999 2000 1999 2000
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
UTILIZATION:
-----------
Domestic-based fleet:
---------------------
Towing-supply/supply 64.2% 52.3 60.7 49.7 57.1
Crew/utility 89.2 74.1 88.1 75.7 86.9
Offshore tugs 40.6 46.8 37.1 42.8 33.5
Other 23.9 76.8 27.3 61.1 30.7
Total 61.7% 55.2 58.8 52.3 56.0
International-based fleet:
-------------------------
Towing-supply/supply 75.7% 67.0 76.2 69.5 76.7
Crew/utility 91.5 90.4 92.7 89.8 93.9
Offshore tugs 67.3 51.2 67.0 58.2 66.8
Safety/standby --- --- --- 77.5 ---
Other 47.0 48.3 44.7 50.2 42.4
Total 74.1% 66.3 74.3 69.2 74.5
Worldwide fleet:
---------------
Towing-supply/supply 71.3% 61.6 70.2 62.1 69.0
Crew/utility 90.7 84.9 91.1 85.0 91.5
Offshore tugs 55.0 49.4 53.4 51.7 51.9
Safety/standby --- --- --- 77.5 ---
Other 42.0 54.4 41.0 52.6 39.9
Total 69.4% 62.3 68.4 63.2 67.5
===================================================================================================================
AVERAGE VESSEL DAY RATES:
------------------------
Domestic-based fleet:
--------------------
Towing-supply/supply $ 4,533 3,484 4,275 3,603 3,990
Crew/utility 2,197 1,790 2,123 1,798 2,046
Offshore tugs 5,927 5,922 6,062 5,969 6,235
Other 1,643 1,250 1,455 1,288 1,305
Total $ 4,169 3,427 3,962 3,496 3,735
International-based fleet:
-------------------------
Towing-supply/supply $ 5,149 5,522 5,108 5,613 5,066
Crew/utility 2,246 2,172 2,242 2,211 2,237
Offshore tugs 4,224 3,818 4,017 3,944 3,814
Safety/standby --- --- --- 6,087 ---
Other 1,318 1,383 1,463 1,322 1,624
Total $ 4,245 4,401 4,209 4,548 4,173
Worldwide fleet:
---------------
Towing-supply/supply $ 4,936 4,878 4,829 5,012 4,717
Crew/utility 2,229 2,059 2,201 2,086 2,173
Offshore tugs 4,804 4,638 4,664 4,646 4,516
Safety/standby --- --- --- 6,087 ---
Other 1,357 1,343 1,461 1,313 1,572
Total $ 4,220 4,088 4,129 4,237 4,035
===================================================================================================================
</TABLE>
-11-
<PAGE>
The following table compares the average number of vessels by class and
geographic distribution for the quarters and six-month periods ended September
30 and for the quarter ended June 30, 2000:
<TABLE>
<CAPTION>
Quarter Ended Six Months Ended Quarter
September 30, September 30, Ended
------------------ ------------------- June 30,
2000 1999 2000 1999 2000
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Domestic-based fleet:
--------------------
Towing-supply/supply 121 129 123 130 125
Crew/utility 26 26 26 26 26
Offshore tugs 33 36 33 37 32
Other 9 9 9 9 9
------------------------------------------------------------------------------------------------------------------
Total 189 200 191 202 192
------------------------------------------------------------------------------------------------------------------
International-based fleet:
-------------------------
Towing-supply/supply 195 219 194 219 193
Crew/utility 48 50 48 50 48
Offshore tugs 38 52 39 51 40
Safety/standby --- --- --- 12 ---
Other 33 33 33 33 33
------------------------------------------------------------------------------------------------------------------
Total 314 354 314 365 314
------------------------------------------------------------------------------------------------------------------
Owned or chartered vessels included in
marine revenues 503 554 505 567 506
Vessels held for sale 48 43 50 47 52
Joint-venture and other 34 44 42 45 51
------------------------------------------------------------------------------------------------------------------
Total 585 641 597 659 609
==================================================================================================================
</TABLE>
The company's sale of its 40% holding in one of its unconsolidated joint venture
companies during the current quarter resulted in a decrease in the joint venture
vessel count by 24 vessels. As the sale occurred during August 2000, the current
quarter average joint venture vessel count does not reflect the total vessel
reduction.
The company sold all of its safety/standby vessels for approximately $40 million
in an all cash transaction during the second quarter of fiscal 2000. This
specialized fleet was sold because it did not conform to the company's long-
range strategies. In July 1999 the company acquired six new-build vessels from
an industry competitor for an aggregate price of approximately $22 million.
During the latter part of fiscal 2000, the company withdrew from active service,
39 older, little-used vessels. Fourteen of the vessels were withdrawn from the
domestic-based fleet and 25 were withdrawn from the international-based fleet.
Vessels withdrawn from active service are intended to be sold.
General and administrative expenses for the quarters and six-month periods ended
September 30 and for the quarter ended June 30, 2000 were as follows:
<TABLE>
<CAPTION>
Quarter Ended Six Months Ended Quarter
September 30, September 30, Ended
------------------- ------------------ June 30,
(In thousands) 2000 1999 2000 1999 2000
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Personnel $ 10,052 9,916 20,142 20,049 10,090
Office and property 2,758 2,752 5,482 5,651 2,724
Sales and marketing 1,079 1,058 2,198 2,168 1,119
Professional services 1,144 1,353 1,994 2,585 850
Other 1,304 1,568 2,461 3,140 1,157
-------------------------------------------------------------------------------------------------------------------
$ 16,337 16,647 32,277 33,593 15,940
===================================================================================================================
</TABLE>
-12-
<PAGE>
LIQUIDITY, CAPITAL RESOURCES AND OTHER MATTERS
----------------------------------------------
The company's current ratio, level of working capital and amount of cash flows
from continuing operations for any year are directly related to fleet activity
and vessel day rates. Fleet activity and vessel day rates are ultimately
determined by the supply/demand relationship for oil and natural gas. Variations
from year-to-year in these items are primarily the result of market conditions.
Cash from ongoing operations in combination with available lines of credit
provide the company, in management's opinion, with adequate resources to satisfy
present financing requirements. At September 30, 2000, all of the company's $200
million revolving line of credit was available for future financing needs.
Continued payment of dividends, currently $.15 per quarter per common share, is
subject to declaration by the Board of Directors.
Investing activities for the six-months ended September 30, 2000 used $1.8
million of cash which included $42 million from proceeds from the sale of
assets, primarily the sale of the company's 40% holding in National Marine
Service for approximately $31 million during the current quarter. Sale proceeds
were offset by additions to properties and equipment totaling $43.8 million
comprised of approximately $6.0 million in capitalized repairs and maintenance
and $36.4 million for the construction of offshore marine vessels and the
acquisition of one platform supply vessel. Investing activities for the six-
months ended September 30, 1999 provided $10.9 million of cash which included
proceeds primarily from the sale of the safety/standby fleet offset by new
construction additions to property plant and equipment. Financing activities
includes quarterly cash dividends of $.15 per share.
In order to better meet and service the needs of its customers, the company
announced on January 20, 2000 a new-build program estimated to cost in the range
of $200 - $300 million. The vessels, which will be designed to cover operational
capabilities the company currently does not possess, will include very large
anchor handling towing supply vessels and large platform supply vessels capable
of working in most of the deepwater markets of the world. The company expects to
finance the new-build program from its current cash balances, its projected cash
flow and its existing revolving credit facility. As of September 30, 2000 the
company has committed to the construction of two platform supply vessels for an
aggregate cost of approximately $45.5 million of which $1.9 million has been
expended. The two vessels are expected to be delivered to the market before the
end of fiscal 2002.
In addition to the new-build program discussed above during the current quarter
the company committed to the purchase of three platform supply vessels currently
under construction for an aggregate cost of approximately $48.4 million of which
$5.0 million has been expended as of September 30, 2000. One of the three
vessels is expected to be delivered to the market before the end of fiscal 2001
while the remaining two vessels will be delivered during the first quarter of
fiscal 2002.
On October 18, 2000 the company entered into an agreement to purchase eight
vessels from The Sanko Steamship Co., Ltd. for $160 million in cash. Closing of
the purchase is anticipated for mid to late November 2000. Four of the vessels
are large anchor-handling towing supply vessels and four are large North
Sea-type platform supply vessels.
INFLATION AND CURRENCY FLUCTUATIONS
-----------------------------------
Because of its significant international operations, the company is exposed to
currency fluctuations and exchange risks. To minimize the financial impact of
these items the company attempts to contract a majority of its services in
United States dollars.
Day-to-day operating costs are generally affected by inflation. However, because
the energy services industry requires specialized goods and services, general
economic inflationary trends may
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not affect the company's operating costs. The major impact on operating costs is
the level of offshore exploration, development and production spending by energy
exploration and production companies. As this spending increases, prices of
goods and services used by the energy industry and the energy services industry
will increase. Future increases in vessel day rates may mitigate the effects on
the company from the inflationary effects on operating costs.
ENVIRONMENTAL MATTERS
---------------------
During the ordinary course of business the company's operations are subject to a
wide variety of environmental laws and regulations. The company attempts to
comply with these laws and regulations in order to avoid costly accidents and
related environmental damage. Compliance with existing governmental regulations
which have been enacted or adopted regulating the discharge of materials into
the environment, or otherwise relating to the protection of the environment, has
not had, nor is expected to have, a material effect on the company. The company
is proactive in establishing policies and operating procedures for safeguarding
the environment against any environmentally hazardous material aboard its
vessels and at shore base locations. Whenever possible, hazardous materials are
maintained or transferred in confined areas to ensure containment if accidents
occur. In addition the company has established operating policies that are
intended to increase awareness of actions that may harm the environment.
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<PAGE>
Item 3. Quantitative and Qualitative Disclosure About Market Risk
---------------------------------------------------------
No change from fiscal 2000 annual report disclosure.
-15-
<PAGE>
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
A. The Annual Meeting of Stockholders of the company was held in New
Orleans, Louisiana on July 27, 2000.
B. Listed below are the nominees who were elected directors at the Annual
Meeting and the name of each other director whose term of office
continued after the Meeting.
Nominee or Director
Name Continuing in Office
---- --------------------
Robert H. Boh Director Continuing in Office
Donald T. Bollinger Director Continuing in Office
Arthur R. Carlson Nominee
Larry D. Hornbeck Director Continuing in Office
Jon C. Madonna Nominee
Paul W. Murrill Director Continuing in Office
William C. O'Malley Nominee
Lester Pollack Director Continuing in Office
J. Hugh Roff, Jr. Director Continuing in Office
Donald G. Russell Director Continuing in Office
C. The company's Stockholders voted as follows with respect to the
proposals presented at the meeting:
1. Arthur R. Carlson was elected director with 52,663,296 votes cast
for and 1,149,760 votes withheld.
2. Jon C. Madonna was elected director with 52,665,572 votes cast for
and 1,147,484 votes withheld.
3. William C. O'Malley was elected director with 52,659,684 votes cast
for and 1,153,372 votes withheld.
4. The selection of Ernst & Young LLP as the company's independent
accountants for the fiscal year ending March 31, 2001 was ratified
with 53,720,209 votes cast for, 50,744 votes against and 42,103
abstentions.
16
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Item 6. Exhibits and Reports on Form 8-K
--------------------------------
A. At page 19 of this report is the index for those exhibits required to be
filed as a part of this report.
B. The company did not file any reports during the quarter for which this
report is filed.
17
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
TIDEWATER INC.
---------------------------------------------------
(Registrant)
Date: October 19, 2000 /s/ William C. O'Malley
---------------------------------------------------
William C. O'Malley
Chairman of the Board, President and
Chief Executive Officer
Date: October 19, 2000 /s/ J. Keith Lousteau
---------------------------------------------------
J. Keith Lousteau
Senior Vice President and
Chief Financial Officer
Date: October 19, 2000 /s/ Joseph M. Bennett
---------------------------------------------------
Joseph M. Bennett
Vice President and
Corporate Controller (Principal Accounting Officer)
18
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EXHIBIT INDEX
Exhibit
Number
------
15 Letter re Unaudited Interim Financial Information
27 Financial Data Schedule
19
